Media rights & advice

[Ryan D.G. Stone]

Hello all,
Apologies for the vague subject line, to be honest I'm not quite sure what I'm asking for! I need some media advice with perhaps a little legal advice thrown in.
I run a small video production company, and we were recently commissioned by a small local company to create an online infomercial for a product of theirs, which we did, and charged them X amount for. The product in question was part of a reseller initiative, and this local company was the reseller. The client was so pleased with our video that he showed the main distributing company, which is fantastic, and even more so that they liked it enough to want one as well!
However, they basically want the same video, but with their company details on the end, plus a few extra changes that extended the video.

We quoted them accordingly for a longer infomercial, and yes they got a few hundred pounds off because some of the legwork has been done, but they were in disbelief that they had to pay so much for a product that in their eyes had already been completed. They then asked how much it would be to keep the video entirely the same but just change the company details at the end, which in black and white terms means they'd spend about £20 for a whole video infomercial that took weeks to create.

I am just totally unsure what to do, surely that can't happen in the real world? A company sees a advert, or piece of marketing done for another company and says "we want that too, we'll just pay for the name change".

I can't tell you how grateful I'd be for some advice on how best to proceed.
Thanks You,

Ryan

[Adam Gold]

My opinion is this, and expect some blowback here: When you're dealing with your creative efforts and IP, it's not about time and materials -- it's about the *license* to use your material in a much bigger market. When you pay for the rights to perform a play, you pay the same as everyone else even though it's already been written and the publisher is putting in no more effort, and that rate is determined by your audience size. So whether you need to put in ten minutes, ten hours or ten days more labor (sorry -- *labour*), the national company needs to pay the same: The Full Freight.

If they like it enough to want it, they will undoubtedly make hundred of thousands of (insert currency here). You add value to that equation regardless of how much more (or how little) work it takes.

The risk here is that they could tell you to jump in the lake. But you need to stand firm and not let others take advantage of you. Strength comes from the ability to walk away. He who cares least, wins.

[Ryan D.G. Stone]

Adam,
That's great advice, thank you. We did think that's how it should work, but really wanted to know what we're talking about before we reply to them. We will be standing firm because we either get them to pay the fee again, or the alternative is they pay next to nothing, so if they do back out, we haven't really lost anything except a decent client name on the portfolio.

Thanks again,

Ryan

[Gordon P. Firemark]

Here's how I see it. The second user shouldn't have to pay your LABOR costs for shooting the original, and should really only pay for the editing involved in re-branding the spot.. .BUT, they SHOULD pay the reasonable VALUE of what they're buying.

So, look at your original fee, deduct the labor costs, keep the creative fee, etc., and add in something for the broader SCOPE of the license you're granting this customer.

THAT's your price. Note that depending on the labor, you could actually be charging the national customer MORE...

The truest power in any negotiation lies with the party willing to say NO to a deal they don't like. Set your price... What it's WORTH to you to have the national customer use your work. (and potentially hire you for other projects in the future). Then, stand firm.

If you discount too deeply now, they'll lose respect, and you'll never get to charge full freight for anything with them in the future.

[Bill Mecca]

I'm not sure, but I think the first company which "commissioned" the infomercial in question may own it, and any rights of use. Unless in the contract it was spelled out that the production company retained the rights.

As usual, I reserve the right to be wrong.

[Nigel Barker]

I'm with Bill here. I would expect the customer commissioning the work to own the rights. Look at your contract. If so the national distributor first needs to agree some deal with your original customer. If you were to do as the new customer wants & I were the original customer I would be pretty pissed off if I had commissioned & paid the full cost for the original work & then the main distributor got the use of that infomercial for next to nothing.

If the original customer will play ball then the smart move would be to try & cut some deal with the main distributor & all the other resellers to do personalised versions of the piece for each of them at a price that reflects the work involved.

[Steve House]

Bill and Nigel: As far as copyright goes, as I understand it, it is the reverse. Unless there's a contract that transfers in writing the copyright to the original program to the client, it is the production company that owns it. Of course, if it contains proprietary materials such as logos and so forth they might not be able to actually do anything else with it without taking that material out. But the fact that a client commissioned a work does not automatically make them the owner of it. Unless copyright is transferred in writing, what the client got for their money was a license to use the program.

[Shaun Roemich]

Steve: I find myself in an awkward position surrounding a client that FEELS they own and deserve the raw materials. Do you have any links to "back up" your above statement (which has always been MY position as well).

[Bill Mecca]

Steve,

as I said I reserve the right to be wrong. ;) My thinking was without a contract it would be a work for hire, and the "commissioner" for want of a better term would own it, would it not? But really we don't have the contract in front of us, or even know if there was one.

[Garrett Low]

Hi Steve,

I have a friend who is a creative director and up until recently she worked for a fairly well know ad agency. She left her company and started her own business and with the permission of the client who commissioned the work, was able to post some examples on her web for her portfolio. Her old company sent her a letter saying to take down all the material since they felt they owned the copyright because she was working for them at the time. She consulted several lawyers and was told that is was just a scare tactic. In fact, the subject material falls under "Works Made for Hire" which in the US states that commissioned works or works made for hire are considered to be authored by the commissioning party. So, the person who hired you to make the video actually owns all the rights. It makes sense since it works that way in almost any other business too with IP. The company you work for owns the work you develop when you are working for them.

So the short answer as I have witnessed now (thank God not directed toward me, I never want to be sued), is that the original client owns the piece and would have to grant the parent company the right to use the piece. They may also need to have language in their agreement that allows you to change the original to sub in their company info.

As another thought, the parent company may also have some language in their agreements with your original client that any material created to promote their product is owned by them. I think there needs to be the dreaded L people involved to figure it out.


Garrett

[Steve House]

Originally Posted by Bill Mecca

Steve,

as I said I reserve the right to be wrong. ;) My thinking was without a contract it would be a work for hire, and the "commissioner" for want of a better term would own it, would it not? But really we don't have the contract in front of us, or even know if there was one.

That's what I meant. ... except in the case where the creator of a copyrightable work is a bona fide employee, for something to be a "work for hire" there must be a written contract that formally makes the work such. Unless such a contract exists (or the work meets certain statutory conditions, none of which apply here) it is NOT a work for hire. The default legal position is the person who actually physically creates the work owns the copyright unless a writing exists that transfers it to another party. So if you're employed by a TV station as a camera operator, paid a wage, subjected to tax witholding, accountable to your boss's direct supervision and direction, etc, you are an employee and they own the copyright to the footage you shoot. But if you're an independent contractor hired to make a show for a client, you, not your client, own the copyright unless your contract with them explicitly states that you are creating a work for hire, using those exact words.

Gordon Firemark, a well-known IP attorney who occasionally posts here (and who contributed to this thread the other day) posted much the same explanation in another thread not too long ago (unless I totally misread him).

[Bill Mecca]

Thanks for clarifying that Steve.

[Steve House]

Originally Posted by Shaun Roemich

Steve: I find myself in an awkward position surrounding a client that FEELS they own and deserve the raw materials. Do you have any links to "back up" your above statement (which has always been MY position as well).

Most of the links online deal with US, not Canadian, copyright law and there are some signifigant differences. For example, I was surprised to learn a few months ago that our laws says that when an independent photographer is engaged to shoot a portrait, the person who contracted to have the portrait made owns its copyright. I believe US law is quite different and there the photographer owns the copyright unless he transfers it in writing. (One of the most amazing differences is in the US works created by government agencies with taxpayer money are in the public domain, free for anyone to use without permission. Here they're copyright owned by the Crown and need permission to be reproduced or distributed.) I'm pretty sure our laws parallel the US in regard to ownership of the rights to video and film however. Certainly our laws regarding work for hire and the definition of employee seem to be virtually identical (to my non-lawyerly reading). In fact, most of the provisions in our copyright office website doesn't seem to be too far removed from the US's. To back up your position I'd start at the Government of Canada copyright website.

As to raw materials, that might be another story. The copyright is on the intellectual content of the work itself. The raw materials such as videotape or DVDs are merely containers to carry and store the intellectual property. Ownership of the program is one thing, but who owns the container holding it might be quite another. When you buy a music CD you definitely own the disc but you don't own the music, you only own a license to listen to it. If your client purchased the materials, he might be entitled to reimbursment for their cost such as the direct cost of the blank tape stock used or replacement with a comparable roll of blank tape. Heck, make a copy for yourself and give him the tape with the program on it, along with a statement that he cannot use the material without permission and be prepared to back it up in court if he does. Just a thought to research. If this is a dispute brewing with a client you really oughta talk to an attorney.

[Shaun Roemich]

Thanks Steve. You've basically backed up EXACTLY what my position is, based on the bit of "concrete" Canadian online law I could find. And the GofC website wasn't all that much help... sadly.

[Nigel Barker]

It's normally US law that gets quoted on this forum but the OP is in the UK & while I am not a lawyer as far as I am aware the copyright always resides with whoever commissions the work unless the contract states otherwise.

Here is a paragraph directed at those commissioning a corporate video from the UK Institute of Videographers web site

Always agree on the copyright ownership of the finished programme. Normally, this would pass on to the client once the final payment has been made. Videographers may want to retain the copyright in any material gathered in the making of the programme but not included in the final programme master. If your material is of a sensitive nature, it would not be unreasonable for you to request copyright ownership of all material. However, it would not be unreasonable for the videographer to take this into account when quoting for the programme.

IOV | Institute of Videography : Corporate Video

The page on wedding videos on that site doesn't even mention the ownership of copyright of the finished work for the very good reason that to British eyes it would be bizarre that the guy who you employ to take the video of your wedding might own the copyright & be able to use it in any way they wanted without your knowledge. While this may be a feature of US law this does not make it normal, fair or right.